Why the Pilbara Minerals (ASX:PLS) share price surged 35% in a month

Lithium demand continues to grow.
The post Why the Pilbara Minerals (ASX:PLS) share price surged 35% in a month appeared first on The Motley Fool Australia. –

Key points

The Pilbara Minerals share price has soared 35% in a month
Demand for lithium has increased the price of the commodity
Brokers remain positive about the outlook for lithium

The Pilbara Minerals Ltd (ASX: PLS) share price is exploding this month.

The explorer’s shares have increased 35% from $2.76 to the current share price of $3.73. However, today the company’s share price is down 3.24% at the time of writing. For perspective, the S&P/ASX 200 Index (ASX: XJO) has gained about 1% in the last month.

Let’s take a look at what may be driving investor confidence in the company.

What’s happening at Pilbara Minerals?

The Pilbara Minerals share price has been on a steady curve upwards in the past month. Investors have been seeing consistent returns for a year, with the share price gaining 223% since this time a year ago.

Investors are reacting positively to rising lithium prices and global demand for the battery mineral used in electric vehicles.

Lithium carbonate prices in China have surged from 235,500 yuan per tonne to 327,500 yuan in the past month, a 39% boost.

Pilbara Minerals explores, develops, and operates its wholly-owned Pilgangoora Lithium Tantalum Project in the Pilbara region of Western Australia. It’s regarded as one of the biggest hard-rock lithium-tantalum deposits in the world.

A positive note out of Citi stating the Pilbara Minerals share is “too early to sell” also weighed positively on the company’s share price last week. The broker predicted demand for lithium will remain strong and supply will stay mild in the next six months.

Meanwhile, as my Foolish colleague Mitchell reported yesterday, the team at Credit Suisse is predicting ASX lithium shares will enjoy “unprecedented margins”.

Macquarie retained its outperform rating on the share in late December and increased its price target by 32%.

The only price-sensitive news out of the lithium miner in the past month was released on 21 December. The miner downgraded its December quarter and FY 2022 annual concentrate production and shipping guidance. Pilbara Minerals also stated border closures had impacted its access to staff for construction, production, and maintenance roles in Western Australia.

Pilbara Minerals is due to release its quarterly results on Thursday 27 January.

What’s going on with the Pilbara Minerals share price?

The Pilbara Minerals share price is up 6.7% in a week and 17.3% year to date.

In contrast, the benchmark ASX index is down about 1% since the start of the year.

The company has a market capitalisation of nearly 11.1 billion based on its current share price.

The post Why the Pilbara Minerals (ASX:PLS) share price surged 35% in a month appeared first on The Motley Fool Australia.

Wondering where you should invest $1,000 right now?

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for over ten years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes could be the five best ASX stocks for investors to buy right now. These stocks are trading at near dirt-cheap prices and Scott thinks they could be great buys right now.

*Returns as of January 12th 2022

More reading

Here are the 3 most heavily traded ASX 200 shares this Tuesday

Why ASX lithium shares could send heads spinning this earnings season

These 3 ASX 200 shares are topping the volume charts on Monday

Here are the 3 most heavily traded ASX 200 shares this Friday

Here are the 3 most heavily traded ASX 200 shares on Thursday

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Macquarie Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

  • This field is for validation purposes and should be left unchanged.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;

To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.

An active and funded account with a positive trading balance is required to continue to have access to the tools;

Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;

Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US & HK* Trades. Click Here!